Judgment:
1. The officers of the department acting on information received by them attempted to stop a truck that had left the factory of 100% export, oriented unit of Goyal Industries Ltd., Palsana, Surat District. It failed to do so. It subsequently found the vehicle which had been abandoned was carrying 134 cartons of 40/13 and 10 cartons of 20/1 of nylon filament yarn. 134 of 40/13 yarn were found covered by a CT3 certificate issued for transporting these goods from the premises of the appellant to the premises of another 100% export oriented unit.
The remaining 10 cartons were not covered by any such certificate.
Ranbeersain R. Goyal the director of the firm appeared before the officer on 2.3.2000 and claimed that he had bought 10 cartons from the market on payment of cash. He could not produce any bill or furnish any evidence as to the identity of the seller. Notice was issued by the department demanding duty under Section 28 on these 10 cartons of 20/1 yarn proposing confiscation under Section 120 of the Act and the remaining is 134 under Section 119 of the Act on the ground that they were used to conceal the other 10 cartons; and confiscation of the vehicle under Section 115 of the Act and penalty on the company, its director and the carrier.
2. The notice cited the provision of Section 123 of the Act with regard to the seized goods. The Additional Commissioner passed orders, which has been confirmed on appeal by the Commissioner (Appeals), confirming the liability to duty and ordering confiscation of 109.40 kgs. of 20/1 of yarn under Section 111 and 120 of the Act, the remaining under Section 119 of the Act and permitted to be released on fine of Rs. 92000/-, confiscation of the vehicle appropriating a bank guarantee of Rs. 20,000/- towards the fine and imposed penalties on the three persons. Hence these appeals.
3. I have heard the common counsel for the three appellants and the departmental representative.
4. The contention that the provision of Section 28 of the Act would not have been invoked to demand the duty on the goods has to be accepted.
The Section provides for issue of notice for duty short levied or non-levied "to the person chargeable with duty or interest which has not been levied or charged" such a person "in the case of importation" clearly be the importer.
The notice itself proceeds on the footing the appellant was not the importer but illicitly purchased the goods from the market leading to clear information that the importer was someone other than the appellant. It is next contended that the confiscation adjudged under Section 111 of the Act is not sustainable. The notice did not cite Section 111 and the Additional Collector could not have travelled beyond the scope of the notice.
5. As I have observed, the notice invoked the provisions of Section 123 of the Act and the Additional Collector in his order also cites that the burden of proving that the goods had not been smuggled which lay upon Goyal Inds. Ltd., had not been discharged by it. Counsel for the appellants accepts that the yarn in question was notified under Section 123 of the Act. That being so sufficient material has been provided to the appellant in the notice for it to conclude that the goods were perhaps to be confiscated as having been smuggled. Smuggling is defined in Sub-section (39) of Section 2 of the Act as meaning any act or omission which would render the goods liable to confiscation under Section 111 or 113. Section 111 applies to imported goods and the Section 113 to exported goods. It is thus clear that despite failure to specifically cite 111 of the Act of the notice, the appellant was made clear that the goods were liable to confiscation under Section 111 of the Act. In such a situation, the failure to mention the specific provision of law does not vitiate the notice. The judgment of the Punjab and Haryana High Court Achhar Singh v. Dy. Collector of Customs & Central Excise 1983 ELT 671 and of the Andhra Pradesh High Court in Jay Engineering Works v. GOI 1979 ELT 307 are authority for this proposition.
6. I am unable to accept the contention that the burden of proving that the goods were not smuggled has been discharged by the purchase of the goods in the open market. It is contended that the presumption exist that the goods in the open market are duty paid. The judgment of the Bombay High Court in Bapson Products 1987 (27) ELT 608 which counsel for the appellant relies upon for this proposition indeed said that there is a presumption that the goods in the market are deemed to have paid excise duty. To this the departmental representative contends that it is no authority for the proposition that imported goods in the market have presumed to have paid customs duty. Apart from this, the provision of Section 123 of the Act clearly makes such a presumption inadmissible. In a situation in which responsibility is cast upon a person to prove that the goods are not liable to confiscation, merely saying that the goods are duty paid does not discharge that burden. The goods may become liable for confiscation not just for non payment of duty but for various reasons. Section 111 has in 16 clause each listing various circumstances which would render the goods liable to confiscation, and not all of them for payment of duty. From the fact that the appellant has failed to discharge by showing the evidence of leviable importation of the goods, the goods become liable to confiscation. In fact the claim that the goods were purchased in the open market itself is entirely unsubstantiated. The appellant is not able to show evidence of such purchase or to name the person from whom he purchased or the date of such purchase. It is accepted by the counsel for the appellant that no entries have been made in the account books for the payment with regard to this purchase. The claim itself was made six days after the appellant came to know of the fact of seizure of the goods. I have therefore no hesitation in holding that the burden of proof cast on the appellant has not been discharged and therefore, in confirming the liability to confiscation of the goods of the 10 cartons.
7. The remaining goods have been ordered to be confiscated under Section 119 on the ground that they were used to conceal the other 10 cartons. The panchnama of the seizure was not produced in order to show whether any such concealment was found. Although these cartons were 10 times more than the number of the other cartons, this fact by itself is not sufficient to say that they were used to conceal the other goods.
In the light of the large number of cartons (allegedly used to conceal) it was unavoidable that the remaining 10 cartons would be so placed that they would necessarily be obscured from view by the larger number of this cartons. From the truck which carried these goods also the officers recovered an invoice of Raju Fabric which showed both the 139 cartons of 40/13 and 10 cartons of 20/1. It is difficult to believe that a person, who used the 113 cartons to smuggle 10 cartons would issue an invoice which would show the presence of the 10 cartons. The notice and the order have not indicated how the large number of cartons were used to conceal others, On consideration of these facts, I do not think a case has been made put for confiscation of 134 cartons and set aside their confiscation. The consolidated fine for redemption of these goods of Rs. 92,000/- is reduced to Rs. 25,000/-.
8. On these facts it is clear that Goyal Inds, and Ranbeersain Goyal, the director become liable to penalty under Section 112. I do not find ground to reduce penalty which is commensurate with the gravity of offence. I do not find ground to reduce fine of Rs. 5000/- owner of the truck who carried the goods. There is nothing to show that he was aware by the fact that these 10 cartons in question was smuggled. No doubt, after the driver vehicle reported driving he did not inform the customs.
9. I therefore allow his appeal and set aside the penalty imposed.
However, the liability of the truck to confiscation has to be confirmed. It has not been shown that the driver or the other person in charge took necessary precaution in the method. On the contrary, the driver had abandoned the truck on it being chased and fled itself leads (in the absence of any explanation for the act which is forthcoming from the counsel for this appellant) leads to the conclusion that they were aware of the carriage of the goods in question. I therefore confirm the confiscation and fine for redemption of Rs. 20,000/- :